Where disputes between employer and contractor result in a series of adjudications, the question may arise as to whether a later adjudication overlaps with an earlier decision. Whether or not the later decision will be binding on the parties and will be enforced will depend upon whether, as a matter of fact and degree, the subsequent dispute was the same or substantially the same as that decided in the earlier adjudication. If it was, the later adjudicator’s decision will not be enforced.  

The case of HG Construction Ltd v Ashwell Homes (East Anglia) Ltd [2007] EWHC 144 discussed in our March 2007 Updater set out the relevant principles which the court will apply when determining this issue.  

The judge described the following case as indistinguishable from the HG Construction case. The judgment is interesting because of the judge’s observations in relation to the issue of serial adjudication.  

Benfield Construction Limited v Trudson (Hatton) Limited [2008] EWHC 2333 (TCC)

There were three adjudications. In the first adjudication, the adjudicator decided that practical completion had not taken place on 17 August 2007. In the third adjudication, the adjudicator decided that, as a result of early partial possession practical completion must be deemed to have taken place on that date.  

The court concluded that it was difficult to imagine a more obvious case of overlap or a starker case of fundamentally contrary decisions.  

The legal principles

  • When considering whether the subsequent dispute was the same or substantially the same as that decided in the earlier adjudication, it was clear from HG Construction that a deciding factor will be the width of the dispute referred to the adjudicator in the first adjudication;  
  • It was important to distinguish between (on the one hand) the underlying dispute between the parties and (on the other hand) the issues and legal arguments which the parties chose to deploy when setting out their side of the dispute;  
  • Whilst partial possession and practical completion were different legal concepts and, depending on the facts, they might give rise to different disputes between the parties, the question was: what was the underlying dispute between the parties at the time of the earlier and later adjudications?  

The court’s findings

The court found that partial possession and practical completion did not give rise to different disputes. Partial possession was simply an aspect of (and an issue to be determined within) the resolution of the underlying dispute as to practical completion and liquidated damages. That issue had been the subject of the earlier adjudication. Once the adjudicator had reached his decision on practical completion and liquidated damages, this decision could not be effectively opened up and “demolished” by a later adjudication.  

Issue estoppel

Alternatively, the court held that it would not be fair, just or reasonable to allow the reference to the later adjudication to stand.  

If the contractor had wished to rely on the partial possession argument separately and independently of its central argument about practical completion then it was plainly obliged to raise that matter in the earlier adjudication. If it failed to do so, that was entirely a matter for the contractor.  

The court’s observations: the abuse of adjudication

The court observed that it should be vigilant to prevent serial adjudication of matters which could and should have been raised first time round. A contractor should not be able to fight about practical completion and liquidated damages based on one set of arguments and facts and then, if it lost on those arguments, dispute practical completion and liquidated damages all over again, by reference to another set of legal arguments which arose out of the same facts. This would be an abuse of the process of adjudication.  

Parties to an adjudication do not recover their costs, no matter how successful they might be. Allowing one party to raise one legal issue at a time in serial adjudications extending over many months or years would place an intolerable burden on the other party. It was not the purpose for which adjudication was designed.  

Editors’ comments

It is clear (in the judge’s words) that adjudication should be a “quick one-off event”. The obvious course open to a party who is unhappy about the outcome of an adjudication is to refer the dispute for final determination by arbitration or legal proceedings, not to commence a further adjudication.  

View: Benfield Construction Limited v Trudson (Hatton) Limited [2008] EWHC 2333 (TCC)